The auto industry bailout

A loyal reader asks me what my position is on bailing out the auto industry.  Since everyone else is weighing in, why not?

First, I’ll note that I’m uniquely qualified to address the question, having been a member of the United Auto Workers and done some consulting for Ford.  How many other bloggers can say the same, even if the first point is technically true but somewhat misleading?  Take that, Paul Krugman!

On Jan 2nd, 1962, GM stock was trading at $28.00  Today it’s at $2.88.  OK, you would have got some dividends along the way, but still, I don’t think you could be too happy with those returns.

It seems wrong to reward the company’s owners and save their company, but also unsatisfying to throw a bunch of people out of work by letting the company fall into bankruptcy, which would kill sales.  Management has clearly failed, and there’s no reason to think the government could do much better.  Why not let the workers run it in a cooperative?  Everyone gets one vote, just like the Green Bay Packers.  Of course, they’d probably have to take big salary and benefit cuts to stay afloat, but that’s life in the city.  If nothing else, it would be an interesting experiment.

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